KIWI FIBRE UNBUNDLING SPARKS ISP ANGST; FIBRE UP

New Zealand businesses are embracing fibre rapidly according to new figures, but there are storm clouds gathering on the horizon, with several ISPs already snarling over proposed pricing for new unbundled fibre services.

Last week Chorus released its proposed unbundled fibre pricing with Vocus and Vodafone – which have already showcased an unbundled offering – immediately hitting back with claims the pricing is too high and will result in a NZ$40/month price increase for fibre users.

InternetNZ quickly jumped into the fray, calling on the ISPs and Chorus to reach an agreement – quickly.

Unbundling will enable retail ISPs to gain direct access to fibre broadband cables so they can install their own technology and manage the full service to their customer, rather than having Chorus or other local fibre companies manage the broadband package details such as speed.

From next year, fibre companies – of which Chorus is the largest in New Zealand – will be required to provide unbundled services.

Chorus’ proposed pricing would see a monthly access charge of NZ$28.70 per month to cover access to the fibre between the premise and the splitter. Retail service providers would also have to pay NZ$200 per month to access the feeder fibre from each splitter – which can have up to 16 customers connected – to a central office where RSPs can pick up the unbundled service.

The network provider has warned the industry not to expect the same level of savings seen from unbundling the copper network.

Ed Hyde, Chorus chief customer officer, said: “While I’m sure some RSPs will argue for even lower input costs, the economic and technical reality of unbundling a newly-built, world-class fibre network is much more challenging than unbundling much older, often fully depreciated, copper network assets that have a fundamentally different architecture.”

“However, we are confident that an RSP that is committed to providing unbundled fibre services will be able to do so at this price point,” he added. “The pricing released for feedback today is the latest step in a near year long process of industry engagement, that has sought extensive feedback on the product and processes that will enable unbundled fibre.”

Back in the mid 2000s New Zealand went through copper unbundling – an extended process that proved to be one of the more contentious periods in New Zealand’s telecommunications history.

Jordan Carter, InternetNZ chief executive, said it would be a shame if an agreement could not be reached.

“Price is a major factor of why some New Zealanders don’t have access to the Internet. Any changes that could potentially increase Internet prices would be a terrible thing and would only expand digital divides,” Carter said. “It’s important that ISPs and Chorus work together to find a mutually agreed solution to unbundling fibre, otherwise the Commerce Commission will need to be involved to find a fair price.”

“It would be a shame if New Zealand’s Internet users had to wait for the Commission to sort this out,” he said.

Fibre growth

The flak comes as newly released Stats New Zealand figures show more than half of Kiwi businesses with six or more staff used fibre-optic broadband connections last year.

Geraldine Duoba, Stats NZ business performance manager, said: “Fibre usage has more than doubled to 52 percent, compared with four years ago. Access to faster broadband is seen as an important factor in enabling increased productivity and promoting economic growth.”

A further eight percent expect to be using fibre within a year.

The financial and insurance services industry had the highest proportion of businesses using fibre, at 82 percent, followed by the professional, scientific and technical services industry – which includes scientific research, legal and accounting, advertising and computer systems design services – at 78 percent.

Across New Zealand there were 714,258 users connected to UFB at the end of December – a 6.8 percent increase on the previous quarter.

New Zealand’s UFB build, which aims to provide UFB access to 87 percent of Kiwis across 390 towns and cities by the end of 2022, was 77 percent complete at the end of December.

The number of small businesses with no plans to use fibre has also dropped, however, 28 percent of businesses with fewer than 20 employees still say they have no plans to use fibre. That’s down from 41 percent in 2016.

NZ’S CHORUS GEARS UP FOR 10GBPS RESIDENTIAL TRIALS

New Zealand is on track for a 10 gigabit per second residential and SMB fibre service, with Kiwi network operator Chorus kicking off trials of the service in mid-March.

The trial, which harnesses Nokia’s XGS-Pon fibre offering to provide 10Gbps in both directions – 10 times faster than the fastest plans available in New Zealand today – will see Kiwis accessing “one of the fastest broadband services available on the planet,” said Chorus chief customer officer Ed Hyde.

The service will be deployed over Chorus’ existing nationwide fibre broadband infrastructure and co-exists with the current offerings, making it “an easy upgrade path” for those wanting faster plans, Chorus added.

Eight retailers – 2degrees, 2Talk, Kordia, Orcon, Slingshot, Stuff Fibre, Trustpower and Vocus Communications – will be involved in the trial, with others also expressing interest.

Kiwis have been quick to embrace ultrafast broadband, which offers 100mbps services, and New Zealand’s UFB rollout has been in stark contrast to the beleaguered NBN.

The national roll-out of the NZ$1.35 billion UFB network – New Zealand’s equivalent of the NBN – saw around 51 percent of those able to connect to the Chorus UFB network, connecting. That’s 504,000 customers.

The UFB build will push fibre to almost 99 percent of New Zealand by 2022.

Meanwhile, Chorus already has 44,000 users on its 1Gbps service.

“In the last eight years New Zealand has seen a meteoric progression in broadband capability. In 2011 the average broadband speed was just 10Mbps or so,” Hyde said.

“When Chorus’ fibre plans first launched in 2012 the top speed then available was 100Mbps. We were then the first to make gigabit fibre broadband available in 2014 and today this is the fastest growing plan on our network with more than 44,000 customers,” he noted.

In December, the average Kiwi household used 235Gb of data for the month, with an average connection speed across the Chorus network of 96.5Mbps. Dunedin, which was the winner of nationwide competition which saw the city receive 1Gbps connections, logged an average connection speed of 349Mbps, well ahead of New Zealand’s other cities. Dunedin Wellington hit 109Mbps, followed by Auckland on 107Mbps to round out the top three.

Last week Optus announced plans for its first 5G offering in Australia. The wireless service, which is expected to begin switching on in the second quarter of this year (though devices are not due to hit the market until mid-year), will be offered at a price point to take on NBN.

NEW ZEALAND WEEKLY ROUND-UP: SMART CITIES, QUANTUM CHANGE

Another strong showing for New Zealand in IDC’s Asia Pacific Smart Cities Awards, a first of its kind network trial for Chorus and a Quantum acceleration for Spark – it’s the week that was in New Zealand’s telco scene.

‘First of its kind’ open access network trial for Chorus

Network provider Chorus has teamed up with Nokia for an open access network infrastructure trial which Nokia said is a ‘first of its kind solution’.

Chorus will trial Nokia’s wavelength services solution for on-demand assurance and fulfilment of Layer 1 services as part of Chorus’ one open access network infrastructure vision designed to accelerate the monetisation of infrastructure by offering fibre access, transport services, premium colocation and network hubs. Chorus said the solution, which is compliant with emerging MEF standards for L1 subscriber services, will enable it to offer new standards-based optical services to service providers.

“With its support for compact demarcation devices and end-customer portal access to fully instrumented service assurance dashboards and reports, we believe that solutions like this will further advance our service offer and put more network control in the hands of our service providers,” Chorus CTO Ewen Powell said.

Three Kiwi projects in running for APAC Smart Cities awards

Three Kiwi projects are finalists in the 2018 IDC Asia Pacific Smart Cities awards, continuing New Zealand’s strong form in the awards.

Auckland City Council has been shortlisted as finalist in two categories. Its Safeswim project, which provides real-time data on wastewater and stormwater network performance, with predictive models, to provide water quality forecasts for swimming sites around Auckland, is in the running for an award in the Smart Water category. The system has significantly improved water safety alerts.

The council’s Upsouth youth empowerment and civic engagement digital platform is also a finalist in the Digital Equity and Accessibility category. Upsouth is designed to improve participation and engagement to increase diversity in decision making. Users earn micropayment for their ideas and contributions from the sponsorship money pool supporting each call/question.

Also in the running for the awards is Datacom’s Antenno, which is a finalist in the Civic Engagement category. Antenno is a mobile app solution designed to improve common action about council services, public safety, public infrastructure and other community information. The app, which is being used by South Waikato District Council and Marlborough District Council, enables local government departments to send alerts and notifications and also receive feedback and input from the community.

Last year New Zealand claimed four Smart City Asia Pacific Awards, with Qrious, NEC, Unison and Waikato District Health all winning.

Jefferson King, IDC New Zealand Associate Market Analyst, said of this year’s showing: “For a country the size of New Zealand to have three projects that stand out on the regional stage is a fantastic achievement.

“New Zealand has consistently punched above its weight in the four years that these awards have been running.”

Management revamp as senior execs depart Chorus

Chorus is revamping its executive team as two senior managers exit the company.

Nick Woodward, product sales and marketing general manager, is leaving after 10 years. Woodward has been with Chorus since it started as a business unit in the then Telecom (now Spark) business in 2008.

Ed Hyde, previously CEO of Spark Ventures, has been appointed as chief customer officer. Hyde said as Chorus nears the conclusion of the bulk of its fibre build, and with a rapidly and dynamically changing environment, customer focus and innovation will be “essential” for the company to achieve its objectives.

Meanwhile, network and file management general manager Ed Beattie will leave in August, with current chief financial officer Andrew Carroll moving into the role. A global search has begun for a replacement CFO, with Carroll remaining as CFO, while also taking on the new role, until a new CFO is found.

Quantum acceleration for Spark

Spark NZ is accelerating its Quantum transformation and performance improvement programme with earnings expected to fall as restructuring costs are brought forward into the FY18 results. The telco is forecasting earnings before interest, tax, depreciation and amortisation of between $971 million and $991 million for the year to June 30 – down from the $996 million to $1.02 billion previously forecast.

Simon Moutter, Spark managing director, said the three frontrunner Agile ‘tribes’ set up by Spark in February are already demonstrating ‘impressive’ improvements in terms of deeply embedded customer centricity, dramatically increased speed to market and empowered and engaged employees with greater productivity.

Changes originally expected to kick in in FY19 all now be implemented this FY.

Spark said additional implementation costs of between $25 million and $30 million are now expected to be brought forward into reported FY18 earnings.